Tishman Speyer Rfp Response
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TISHMAN SPEYER | MEGA MERCER RFP RESPONSE MERCER MEGA BLOCKS TISHMAN SPEYER RFP RESPONSE OCTOBER 2018 1 TISHMAN SPEYER | MEGA MERCER RFP RESPONSE TABLE OF CONTENTS 1. Cover Letter ................................................................................................................................ 3 2. Project Executive Summary ........................................................................................................ 4 3. Tishman Speyer ......................................................................................................................... 6 4. Financial Qualifications ............................................................................................................. 18 5. Project Concept and Public Benefits ......................................................................................... 19 6. Project Design .......................................................................................................................... 33 6.B.Project Design Alternate – Skypark Concept ....................................................................... 34 7. Financial Offer ......................................................................................................................... 36 8. Project Financing Plan ............................................................................................................... 42 9. Endorsements for Tishman Speyer’s Bid ................................................................................... 48 2 TISHMAN SPEYER | MEGA MERCER RFP RESPONSE 1. COVER LETTER October 5, 2018 CONFIDENTIAL Lori Hill Managing Director, JLL 601 Union Street, Suite 2800 Seattle, WA 98101 RE: RFP Response – Mercer Mega Blocks On behalf of Tishman Speyer, we are pleased to submit the enclosed RFP response for your consideration. We are very excited about this opportunity, and it has been a true pleasure to work on our RFP response for a site of this caliber. The Mercer Mega Blocks represent a fantastic large-scale opportunity to create a sustainable, inclusive and highly-designed destination at the gateway to South Lake Union. The site plays to many of Tishman Speyer’s strengths – large scale with numerous complexities; public visibility which demands our commitment to world class architecture, marrying world-class design with local tastes; a track record of delivering high-quality affordable housing; an unwavering commitment to sustainable construction and ongoing management; alongside a superior location which meets our requirements for world-class sites which we can invest in over the long term. Our intent is to use this unique opportunity to create a flagship development that not only stands as an example of innovative and creative green and transit-friendly design, but also aligns fully with Seattle's values and commitment to building strong and diverse communities. Through our proposal we are committed to working in partnership with a range of respected local non-profit organizations to ensure the resulting site offers benefits to all Seattleites, regardless of their race, gender, sexual orientation or income level. We have already begun exploring collaborations with organizations like the Urban League of Metropolitan Seattle, Ventures, Bellwether Housing, the Cascade Bicycle Club, the Seattle Building Trades, and SEIU – all of whom endorse this proposal – and continue to actively explore other similar partnership opportunities with additional local non-profit leaders and community stakeholders. We look forward to working with you and the community on this site, and to further discussing the contents of this document with you. For more information on Tishman Speyer, please refer to the enclosed overview of the firm and our history within this RFP response, as well as further information on www.TishmanSpeyer.com. If you have any questions or comments on our proposal, please do not hesitate to contact Leo Shapland at (206) 442-4310 or Carl Shannon at (415) 344-6630. Sincerely, Carl D. Shannon Leo Shapland Senior Managing Director Senior Director, Lead Respondent [email protected] [email protected] | fax: (206) 622 2769 3 TISHMAN SPEYER | MEGA MERCER RFP RESPONSE 2. PROJECT EXECUTIVE SUMMARY Our vision for the Mega Mercer Blocks is to facilitate a new hub for the neighborhood that embodies the best of Seattle: innovation and inclusivity. We will bring our experience designing iconic spaces and social infrastructure for the world’s leading innovators, alongside an ambitious retail, affordability and cultural program that will house authentically Seattle artisans, communities and artists. Among other things, this will facilitate a cross-pollination of ideas between tech and art, and provide housing for the communities that help make Seattle such a great and vibrant place to live, but whom we are in jeopardy of losing. The Mercer Mega Block site is a world-class development opportunity that fits in ideally with Tishman Speyer’s core strengths – namely in that it is a high-profile, large scale, ground-up development opportunity which affords the possibility of innovative design attracting top tier tenants, the scale to enable truly sustainable construction and operation practices that make a difference, and the ability to create a place that can be a destination for occupiers, visitors to the building, and the general public. The site is also complicated – and, given the nature of the proposed sale of the site, highly-visible from a public perspective – and therefore requires a team with a deep track record of financing and developing high-quality, complex projects that have been the hallmark of Tishman Speyer’s expertise since the company’s inception. We have spent a great deal of time working on this RFP response, potential design options, proposed concepts, financial structure, highest and best uses, and the community benefits package that underpins it. We recognize that a site of this caliber requires a truly thoughtful approach from multiple disciplines across our firm – while this was prepared and submitted by our local team, this has received the highest visibility and attention from senior management of the company to bring our global skillset to the project. Our track record of acquiring, developing and managing projects like this in cities across the globe is almost unparalleled, alongside a long and growing track record of developing affordable housing, which we hope is apparent through our response and the projects we reference. We propose two main project concepts for the site – the first represents a mixed commercial approach with retail, lab space, and offices, targeting what we believe to be the highest sale value for the City. The second proposes the same retail/lab/office approach on the Mercer site, but proposes a high-quality, permanently affordable housing building on 615 Dexter, aimed at an average AMI of 60%, covering the AMI range from very low through to workforce housing – to house the people that are consistently priced out of the city they serve and protect. Within this RFP, we have offered a range of transaction prices for the property that gives the City the flexibility to choose between an all-commercial development plan or a commercial and affordable housing development plan, and to elect either a ‘fee simple’ or ground lease approach for each scenario. Further detail on our proposal is contained in Section 7 below, however the following table provides a high-level summary of our proposed offer: Mixed Commercial (Office + Lab) Commercial + 175 Units Affordable Fee Simple $160M $104M Ground Lease $70M + $4M annual ground rent $40M + $2.75M annual ground rent 4 TISHMAN SPEYER | MEGA MERCER RFP RESPONSE We believe an inclusive and dynamic project will be a better project, and part of what improves the long term health and sustainability of the market for our and others’ benefit as long-term stakeholders in Seattle. Beyond the real estate and economic proposal to the City, we recognize and fully support the City’s commitment to a public benefits on the site. Within this proposal, we have proposed a range of community and public benefits, including: - Sustainability: we commit to a minimum LEED Gold standard, as well as to LEED-certified operating practices once construction completes. We also commit to Salmon Safe practices, as well as bringing our market-leading approaches and experience from other global projects to develop innovative water and energy management programs; - A planted and green roof area on the site larger than Westlake Park – for energy conservation, water runoff, and encouraging biodiversity; - Affordable housing – depending on the City’s preferred development plan, we could offer 175 high-quality, family-oriented, permanently affordable units on the 615 Dexter site. Should this be the preferred option we would commit to building the affordable housing of comparable quality to market rate projects in the vicinity; - Union Labor – an upfront commitment to use 100% union labor on all construction trades, and union labor for ongoing building operations – a commitment of hundreds of millions of dollars to union labor; - Transit – a pro-active transit program which targets a 20% reduction in single occupancy vehicle trips to mitigate impact on Seattle’s worsening traffic, as well as a commitment to extend the Mercer Cycle Track; - A place, not space – bringing our expertise at design and programming of mixed use retail spaces like the Rockefeller Center to the property,